Telangana RERA Orders Refund To Homebuyers And Imposes ₹1.16 Crore Penalty On Jayathri Infrastructures For Selling Unregistered Project

Background Facts

Homebuyers (Complainants) booked flats in the builder's (Respondent) upcoming project, Lexico Park, and made advance payments to the builder. The builder promised to deliver possession of the flats by December 2024. However, according to the homebuyers, no construction activity has commenced since March 2021.

When the homebuyers inquired about the progress of the project, the builder's management informed them that the project had been canceled and that the amounts paid would be refunded. However, to date, the homebuyers have not received their refunds. Therefore, being aggrieved, the homebuyers filed complaints before the authority, seeking a refund with interest.

Observation and Direction of Authority

The authority found that the builder advertised the "Lexico Park" project online, signed agreements, and issued payment receipts to the buyers without having legal ownership of the property or obtaining RERA registration for the project. Therefore, builder has violated Section 3 of the Real Estate (Regulation and Development) Act, 2016.

Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was held that if the builder fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer's right under the RERA, 2016 to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

The authority also referred the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Another, where it was held that under Section 18 of the RERA Act, if a builder fails to complete or give possession of an apartment by the specified date, the builder must return the amount received if the homebuyer wishes to withdraw from the project.

The authority observed that the builder kept the homebuyers waiting for two to three years with false promises of registering the units in the homebuyers' names. After the complaints were filed, the builder admitted they failed to acquire the project. Therefore, the authority held that the homebuyers are entitled to a refund with interest.

Therefore, the authority directed the builder to refund the amount paid by the homebuyers along with interest at 10.65% per annum. Additionally, the authority imposed a penalty of ₹1,16,99,344 on the builder for violating Section 3 of the RERA, 2016.

Case – M.Sathvika Versus M/s Jayathri Infrastructures India Pvt Ltd A/w 13 others

Citation - COMPLAINT NO.1390 OF 2024 A/w 13 others